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Hennion & Walsh Releases 2015 Summer Market Outlook

published: Jun. 02, 2015

PARSIPPANY, N.J., June 2, 2015 /PRNewswire/ — Hennion & Walsh, a provider of investment services and an advocate for individual investors, today released their Market Outlook for Summer 2015. The latest research report reveals that U.S. economic recovery is expected to continue in 2015 with an annualized GDP of 2.6 to 3 percent, and is expected to pick-up speed by year-end. However, the most interesting story to watch in 2015, which could also have the biggest impact on economic and market growth, will be the price of oil.

Hennion & Walsh’s research suggests that the volatility from the first half of 2015 reminded investors about the value of diversification in their portfolios. Equity volatility was more pronounced in the U.S., rather than international markets, as quantitative easing and stimulus from the central banks attracted investment flows into Europe and Japan. In addition, small cap stocks were the top performer in Q1 and growth stocks have significantly outperformed value across all market capitalizations thus far in 2015.

“With economic growth and U.S. stock markets on the rise, we believe that now may be an appropriate time to begin adding some allocations to certain international, developed and emerging market equity strategies to individual investor’s portfolios as international equities offer a more compelling investment opportunity over the intermediate-long term,” said Kevin Mahn, Chief Investment Officer at Hennion & Walsh. “Given the many moving pieces of this complex economic puzzle, investors would be wise to re-visit their asset allocation strategies to ensure they have diversification in place to withstand potential periods of heightened volatility.”

Moving into the second half of 2015, Hennion & Walsh’s research team has identified five factors that they believe will be critical to market growth potential. These include: job market, housing, oil prices, U.S. and global economic and stock market growth and interest rates.

• Job Market: Historically, the job market has been one of the Fed’s key benchmarks for economic soundness. While the labor force participation rate remains a concern, investors should focus more on trends in employment and jobless claims rather than in unemployment.

• Housing Market: Investors should pay close attention to trends in housing data as it will likely be one of the engines of future growth for the U.S. economy. While existing home sales continue to struggle in the lower price ranges, there are signs of renewed strength in many of the mid-higher price ranges.

• Oil Prices: Worldwide demand for oil remains weak, and some of the world’s largest producers are pumping oil at, or even above, their existing production levels which points toward lower oil prices, but how much longer will prices stay at artificially low levels?

• Global Economic and Stock Market Growth: The prospects for continued economic growth in the U.S. remain strong, but Europe’s economic recovery will be plagued by persistent debt issues, while Japan is poised to experience upside growth in its markets due to the accommodative stance by the Bank of Japan. More progress is needed with respect to U.S. economic recovery, and actual progress is needed with the European economic recovery, for Emerging Markets to benefit.

• Interest Rates: The Fed will begin to raise interest rates in 2015 and when it does, they will likely follow the blueprint that it utilized during the 2004-2006 tightening period when it gradually raised the Federal Funds Target Rate on 17 different occasions. A gradual, drawn out tightening remains appropriate given the state of the U.S. economy.

“Given our current outlook, we believe that asset allocation decisions will be critical to the long-term success of an investment portfolio, and should be constructed in accordance with one’s investment objectives, timeframe, and tolerance for risk,” said Bill Walsh, Partner at Hennion & Walsh. “For the remainder of 2015, we recommend the following to investors: maintain current overweight exposure to the U.S., but diversify across capitalizations; look to start adding equity allocations globally; review asset classes that have historically benefitted from improving economic conditions accompanied by rising interest rate environments; consider REITs as an alternative; and remember that bonds can still be effective for income and growth oriented portfolios.”

A full copy of Hennion & Walsh’s latest Market Outlook can be downloaded here.

About Hennion & Walsh Hennion & Walsh, a full service brokerage firm specializing in municipal bonds, was founded in 1990 by Richard Hennion and Bill Walsh. Their mission is to be the individual investor’s fiercest and most passionate advocate. Investment guides, webinars, seminars and online content are just some of the ways they help investors become better informed and make better investment decisions. The firm has built its reputation on developing strong, mutually beneficial relationships designed to last a lifetime, serving over 18,000 clients with brokerage accounts and managed portfolios. They are committed to providing individual investors with the institutional-quality service and guidance they believe they are entitled to. Additional information on Hennion & Walsh is available at www.hennionandwalsh.com. Hennion & Walsh is a member of FINRA and SIPC.